January 18, 2005

Transformation + Learning
These are inseparable. Transforming an organization requires transforming its people one by one.. IBM’s spectaular fall and rebirth are a great example. “I came to see in my time at IBM that ‘culture’ isn’t just one aspect of the game—it is the game.” — Lou Gerstner

Definitions of Transformation

Dictionary
the act of changing in form or shape or appearance
a marked change in nature, form, or appearance.
a complete change, usually into something with an improved appearance or usefulness
in theology, a change in disposition, heart, character, or the like; conversion

Examples
Collins’s Big Hairy Audacious Goals: 10- to 30-year timeframe
3os: Merck decides to shift from chemicals to drugs
1915: Citi decides to become the most far-reaching financial institution the world has even seen
1990: WalMart: Become a $125 billion company by 2000
1950: Boeing: Become the dominant player in commercial aircraft and bring the world into the jet age
1960s: Nike: Crush Adidas
1940s: Stanford: Become the Harvard of the West
1980s” GE: Be number one or two in every market we serve

Famous radical transformations
IBM goes into the computer business
American Can becomes a financial company
Greyhound dumps buses, becomes Dial
UNISYS dumps manufacturing, goes 100% services

Linkage to workforce

Suppose that we were able to share meanings freely without a compulsive urge to impose our own view or to conform to those of others and without distortion and self-deception. Would this not constitute a real revolution in culture and therefore eventually in society?

Through ongoing practice with dialogue, participants learn how to be with each other differently. They practice skills and guidelines that encourage new norms. The more often they are practiced, the more dialogical communication is used beyond the practice sessions — leading to the actual state of community.

Dialogue sets up the conditions of community. While groups new to dialogue will not be in full community when they first start out, the atmosphere induced by dialogue has the ” experiential feel ” of community. Individuals, thus begin to pick up at a tacit level what a culture based on community principles feels like. They incorporate it at an intuitive level.

As group members experience the effects of dialogue, a profound shift takes place at the belief and attitude level. This comes about as a byproduct of the incorporation of new modes of behavior and learning the ” feel ” of what being in community is like. Attitudes of rigid individualism give way to attitudes of collaboration and partnership. Beliefs strengthen around the ” value of the group as a whole. ”

When I analyzed the mission statements of the eighteen visionary companies in Built to Last, I found that sixteen had three or more objectives. The majority of their objectives (44%) concerned well-being, and only 20% concerned corporate fituess. Surprisingly only 6% of the objectives mentioned corporate survival (profits or shareholder value).

What is remarkable is that all 18 companies had objectives concerning corporate well-being, whereas 13 had objectives relating to corporate fitness, and only 6 to corporate survival.

Some of the more inspiring values-driven examples of statements adopted by these companies are:

“We are in the business of preserving and improving human life.”
“People as the source of our strength.”
“Improving the quality of life through technology and innovation.”
“People are number one—treat them well, expect a lot, and the rest will follow.”
“Corporate social responsibility.”
“Honesty and integrity.”

The conclusion I reach (indeed, one of the main messages of Liberating the Corporate Soul), is that an organization’s performance is directly related to its ability to tap into its human potential. For the average person, work is one of the most important ways he or she gives expression to who they are, and find their fulfillment.

When a group of people are committed to a common purpose, are given responsibility, and at the same time feel supported and trusted, then, and only then, will they tap their deepest potential. Emotional energy, not mental energy, is the true motivator of the human spirit.

Emotional energy has its source in what people believe and value. Values give meaning to people’s lives. When there is an alignment between an organization’s values and its employees values then people respond by fulfilling their potential and tapping their deepest levels of creativity.

Business-driven Transformation

“Transformation is the continual process of tying your business together internally so can you ship what customers order, accurately forecast what your market desires, constantly innovate, and ensure that all the parts are working together,” says Tom Davenport

Accenture reports that only 42% of companies report that they have achieved most or all of the targeted benefits from their transformation initiatives. (Of course, probably a third of those initiatives were Accenture deals.)

Accenture identifies these major transformations. I agree these are catalysts, but I don’t think they qualify as transformations in and of themselves:

Improve management decision making. Managers supported by technology tools that enable efficient decision making are able to make better, faster decisions that align with the organization’s strategies.Improve financial management. Financial and general managers can exert tighter financial control, make better predictions about financial performance, and more effectively assess the implications of operational changes on key performance metrics.Improve customer service and retention. Integrated customer information allows organizations to serve their customers faster and more effectively.Simplify expansion and increase flexibility. Transformation solutions enable a more agile organization, position an organization for growth, and simplify the integration of newly acquired entities.Make transactions faster and more accurate. Highly integrated, accurate databases result in reduced IT costs, improved data quality, and better customer service.Reduce cycle time. Completing processes such as bringing a product to market faster enables an organization to be more nimble, cut costs, and improve responsiveness to its employees and customers.Improve inventory and asset management. Consistent, tightly integrated systems allow organizations to provide better service and reduce costs through supply-chain efficiencies such as decreased inventory or better control of PCs and employee equipment.Reduce physical resources and improve logistics. Streamlining logistics and minimizing the associated physical resources allows organizations to become more efficient and reduce overhead costs.Increase revenue. Highly integrated business processes can enable an organization to offer new products or exploit new channels, thus creating new revenue-generation opportunities.